One of the key item to understand regarding backup is the archive bit. The archive bit is used to determine what files have been backuped already. The archive bit is set if a file is modified or a new file is created, this indicates to the backup program that it has to be saved on the next backup. When a full backup is performed the archive bit will be cleared indicating that the files were backup. This allows backup programs to do an incremental or differential backup that only backs up the changes to the filesystem since the last time the bit was cleared
Full Backup (or Reference Backup)
A Full backup will backup all the files and folders on the drive every time you run the full backup. The archive bit is cleared on all files indicating they were all backuped.
Advantages:
All files from the selected drives and folders are backed up to one backup set.
In the event you need to restore files, they are easily restored from the single backup set.
Disadvantages:
A full backup is more time consuming than other backup options.
Full backups require more disk, tape, or network drive space.
Incremental Backup
An incremental backup provides a backup of files that have changed or are new since the last incremental backup.
For the first incremental backup, all files in the file set are backed up (just as in a full backup). If you use the same file set to perform a incremental backup later, only the files that have changed are backed up. If you use the same file set for a third backup, only the files that have changed since the second backup are backed up, and so on.
Incremental backup will clear the archive bit.
Advantages:
Backup time is faster than full backups.
Incremental backups require less disk, tape, or network drive space.
You can keep several versions of the same files on different backup sets.
Disadvantages:
In order to restore all the files, you must have all of the incremental backups available.
It may take longer to restore a specific file since you must search more than one backup set to find the latest version of a file.
Differential Backup
A differential backup provides a backup of files that have changed since a full backup was performed. A differential backup typically saves only the files that are different or new since the last full backup. Together, a full backup and a differential backup include all the files on your computer, changed and unchanged.
Differential backup do not clear the archive bits.
Advantages:
Differential backups require even less disk, tape, or network drive space than incremental backups.
Backup time is faster than full or incremental backups.
Disadvantages:
Restoring all your files may take considerably longer since you may have to restore both the last differential and full backup.
Restoring an individual file may take longer since you have to locate the file on either the differential or full backup.
For more info see: http://support.microsoft.com/kb/136621
Source: KRUTZ, Ronald L. & VINES, Russel D., The CISSP Prep Guide: Mastering the Ten Domains of Computer Security, 2001, John Wiley & Sons, Page 69.
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